Senators' mortgages under microscope

Amid a brewing scandal over special mortgage deals given to two U.S. senators, Politico last week asked the offices of all 100 senators to describe the circumstances under which they obtained their own home loans. Seventy-seven senators have complied so far. Twenty-three have not.

Senators are not required to report in their disclosure forms any financial information about their homes unless they draw rental income from the home. But in the wake of questions regarding mortgages obtained by Sens. Chris Dodd (D-Conn.) and Kent Conrad (D-N.D.) — loans they received through a VIP program run by Countrywide Financial Corp. — Senate Majority Leader Harry Reid (D-Nev.) has said that the disclosure rules should be changed so that senators’ mortgage details are made public.

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The results of the Politico survey— available here —suggest that may be an uphill battle.

Many senators who did not provide mortgage information contend that the details are private. Elly Pickett, a spokeswoman for Sen. Michael B. Enzi (R-Wyo.), wrote in an e-mail to Politico: “Sen. Enzi’s mortgage isn’t with Countrywide, and since that company is at the center of this issue, I fail to see how having a loan with another company is at all relevant.”

Similarly, a spokesman for Sen. John Thune (R-S.D.) e-mailed that his boss did not need to disclose details: “The senator was a private citizen when he and his wife obtained their mortgage through a local bank, which was not Countrywide,” wrote Thune spokesman Kyle Downey.

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Congressional ethics expert Stanley Brand, a Washington lawyer who has represented ethically challenged lawmakers over the years, said he would advise clients not to reveal any more information than they have to under the rules.

“People are going to be questioning and scrutinizing and prying into this matter in a way that suggests something was given that was not available to others,” said Brand, who represented Sen. Larry Craig (R-Idaho) last year in connection with his arrest in an airport men’s room. “It may pique the interest of DOJ, the ethics committees and banking regulators.”

Despite such concerns, 77 senators did respond to Politico’s inquiries. Twenty-eight reported having no mortgages. According to the Mortgage Bankers Association, only 35 percent of Americans own their homes outright.

Many senators are able to pay cash, as Reid did when he purchased a condominium at the Ritz-Carlton in Washington several years ago.

Reid told Bloomberg News this weekend he thinks home mortgages should be disclosed on Senate financial forms, even as he dismissed some of the controversy over Senate mortgages as “a press fishing expedition.”

Responding to Politico’s inquiries, Reid’s office said that, while he owns his Washington condo free and clear, he carries a “tiny” Wells Fargo mortgage on property back home in rural Searchlight, Nev.

Conrad, who is at the center of the controversy over VIP treatment by Countrywide, said last week that he also believes mortgage information should be revealed.

Senate ethics experts say the controversy over the special mortgages received by Dodd and Conrad has opened a window into the clubby world where senators can dial up major banking executives and discuss their financial needs, as Conrad did.

“This short list of senators who did not disclose is where I would start an investigation,” said Keith Ashdown, a vice president of Taxpayers for Common Sense. By failing to disclose, he said, senators are “not only in the cross hairs of investigators, but they’re also making this a political issue in an election year, because it looks like they have something to hide.”

Disclosing all mortgage details “makes them more inclined to be sure they’re not getting any special deals, because it’s being disclosed,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. “Why not just disclose [mortgages] and get rid of a potential issue?”

Politico began asking senators about their mortgages on Tuesday, June 17, in the wake of a Conde Nast Portfolio magazine report on the mortgage deals given to Dodd and Conrad. Each office that has not yet responded to the story was given several opportunities to do so.